These monetary stimulus policies have pushed intermediate- to long-term interest rates lower than they would be otherwise.

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Second, interest rates are likely to remain low for the intermediate term and credit is likely to be tight.

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Osterweis Strategic Income has more credit risk but lower interest-rate risk (due to shorter average duration) than some intermediate-term bond funds.

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To reduce interest-rate and default risk, Ms. Benz suggests sticking with intermediate-term muni-bond funds with a high percentage of their holdings in general-obligation bonds, which are repaid with tax revenue.

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